In a bid to accelerate the adoption of electric vehicles (EVs), the UK government has reintroduced a grant offering discounts of up to £3,750 on eligible electric cars.
This initiative, part of the broader effort to achieve net-zero emissions by 2050, is set to make electric cars more affordable for UK drivers, with the scheme targeting vehicles priced below £37,000. The grant comes at a time when consumers have shown hesitance due to the high upfront costs of EVs, despite growing environmental concerns.
The £650 million Electric Car Grant (ECG) will be available from July 16, 2025, and will be awarded directly to consumers at the point of sale. This new funding aims to help close the gap between the cost of electric and petrol vehicles, which many consumers still perceive as unaffordable.
The scheme is expected to run until 2029 and will provide crucial support to the UK’s automotive sector, as manufacturers strive to meet tightening emissions regulations.
The Details of the Electric Car Grant Scheme
The £650 million ECG is structured to offer tiered discounts based on the sustainability of the vehicle’s manufacturing. Cars manufactured by companies that meet higher environmental standards will qualify for the largest discounts, potentially up to £3,750 per vehicle.
According to the Department for Transport (DfT), the initiative focuses on cars priced at or under £37,000, which includes a wide range of models across various manufacturers.
Discounts will be available for vehicles from manufacturers who commit to Science-Based Targets (SBTs) to reduce emissions in line with global climate goals. Models meeting the highest sustainability standards will benefit the most, with a second tier of vehicles qualifying for discounts of up to £1,500.
This emphasis on “green” credentials is aimed at pushing for a more sustainable and eco-friendly automotive industry, while also making EVs more accessible to the public. In addition to the grant, the UK has made significant investments in public charging infrastructure, which now includes over 82,000 chargepoints across the country.
With a further £63 million earmarked for expanding charging facilities, the government aims to ease concerns about the lack of accessible charging options—an issue that has long deterred some drivers from making the switch to electric.
Potential Impact on the UK’s Electric Vehicle Market
The reintroduction of the Electric Car Grant comes at a critical time, as the UK car market faces a slowdown in private EV purchases. While commercial fleet buyers have driven a surge in electric vehicle sales, private buyers have expressed concerns over high initial costs and range anxiety.
According to industry experts, such as Simon Williams from the RAC, the new scheme could be the key to stimulating demand in the private sector.
The new grants will apply to many popular models, including the Mini Countryman E and the Citroen ë-C4, priced below the £37,000 threshold. However, the scheme is not without its limitations.
Notably, higher-end brands such as Tesla, BMW, and Audi will be excluded from the grant due to their higher price tags, leaving some consumers with fewer choices within the subsidised range. Despite this, the government’s initiative is expected to bolster the UK’s position as a leader in electric vehicle adoption in Europe.
